By James Anyanzwa

Co-operative Bank group is now the single largest shareholder in the Co-operative Insurance Company (CIC) after acquiring an additional 19 per cent stake. The transaction, valued at Sh130 million, brings Co-op bank’s shareholding in the insurance firm to 21 per cent, and gives it two seats in CIC’s board.

The latest move is meant to push Co-op bank into the insurance business, as the bank seeks to entrench its ‘financial supermarket’ banking model.

"We are pleased to announce the enhanced strategic partnership with CIC. The partnership increase the competitiveness and revenue base of the two institutions, which will see to mutual greater shareholder value," the bank’s Managing Director and Chief Executive, Gideon Muriuki, told an investor briefing in Nairobi yesterday.

According to Muriuki, the partnership would allow the bank to provide insurance services, grow its commission income streams, and provide a diversified investment portfolio to its shareholders.

It would also strengthen the bank’s ‘financial supermarket’ model for the over 8 million member co-operative movement, he added.

The bank’s other financial services include stock broking, mortgage financing, coffee marketing, Points of Sale, fund management, and consultancy services.

Well positioned

Muriuki said the bank is well positioned to sustain its profitability and ensure greater return to its shareholders.

"Our best days are still ahead," he said.

He said CIC would benefit by selling insurance products through Co-op bank’s countrywide branch network of 86 branches, and by leveraging on the bank’s strong balance sheet and over 1.4 million customers. CIC would also draw on the human capital expertise within the bank, and access the bank’s payment platform for use by CIC customers.

"We are very happy to be partnering with the bank. We want to build on the success of Co-op bank to move regionally," said Nelson Kuria, CIC’s managing director and chief executive.

"We consider Co-op bank a big brother in the co-operative movement. We believe such kind of partnerships diminish weaknesses and magnify strengths."

17 branches

CIC, the country’s fourth largest life insurance company, has grown its branch network to 17 branches, with a customer base of 1.3 million clients. The insurer’ s total asset base and total income in 2009 stood at Sh4.5 billion and Sh2.8 billion respectively.